Central bankers generally aim their policies at money supply, inflation and some measure of employment, with often little effect. Targeting a savings rate target of 10 per cent in the United States would give Fed chief Janet Yellen and her peers something genuinely useful to aim at.JOHN GRESS/Reuters
The Toronto stock market advanced Tuesday as investors continue to buy up stocks that suffered during the worst of a market downturn earlier in the month and looked ahead to Wednesday's interest rate announcement from the U.S. Federal Reserve.
The S&P/TSX composite index gained 29.36 points to 14,498.36. The Canadian dollar was ahead 0.28 of a cent to 89.26 cents (U.S.).
U.S. indexes were also positive with the Dow Jones industrials ahead 69.57 points to 16,887.51, the Nasdaq gained 27.74 points to 4,513.67 and the S&P 500 index climbed 8.79 points to 1,970.42.
Traders will also look for reassurance that the Fed is in no hurry to raise rates from near zero.
This Fed meeting on Tuesday and Wednesday comes as the central bank's key stimulus program – its massive bond purchases designed to keep long-term rates low – is set to wind up at the end of this month.
There have been concerns over how the markets, and the U.S. economy, will fare without the prop from the Fed that also encouraged investors to buy into equities as returns on other securities were so small in comparison.
On the economic calendar Tuesday, orders for U.S. durable goods retreated 1.3 per cent in September after a record 18.3 per cent tumble in August. The August drop followed a record 22.5 per cent increase in July. The wide swings in both months were driven by the volatile aircraft category. Also, a category that serves as a proxy for business investment fell 1.7 per cent in September, the biggest drop since January.
Also, U.S. home prices grew more slowly in August amid modest sales. The Standard & Poor's/Case-Shiller 20-city home price index rose 5.6 per cent in August from 12 months earlier. That's down from 6.7 per cent in July. Home prices were rising at a double-digit pace as recently as last fall.
Traders also looked to the latest batch of corporate earnings.
Drugmaker Pfizer Inc. reported third-quarter profit of $2.67-billion (U.S.) or 42 cents a share. Adjusted earnings were 57 cents a share, a penny higher than estimates and its stock rose 21 cents to $29.24.
Science and chemicals company DuPont said that ex-items earnings were 54 cents a share, two cents better than forecast and its shares climbed 50 cents to $68.38.
After the close Monday, Twitter posted adjusted earnings of one cent a share, matching expectations. But investors concerned about user growth and holiday-quarter revenue sent the stock tumbling 12 per cent.
Financials led TSX advancers, up 0.4 per cent.
The base metals sector gained 0.2 per cent while copper prices were up two cents to $3.09 a pound.
The energy sector was the biggest weight, down 0.4 per cent as energy stocks continued to suffer in the wake of a report from Goldman Sachs that it expects oil prices to tumble into the next year as shale gas production grows and oil supply outstrips demand. December crude ticked up six cents to $81.06. It had slipped below the $80 threshold following the release of the Goldman report.
The gold sector eased 0.1 per cent while December bullion gained $3.40 to $1,232.70 an ounce.